Eastern Distributor Limited (EDL) is a rapidly growing distributor of health-care products operating in three regions

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Eastern Distributor Limited (EDL) is a rapidly growing distributor of health-care products operating in three regions — Ontario, Quebec, and the Maritimes. In the last three years, the company has experienced a 20 percent growth rate. Data processing operations are distributed. There is a minicomputer at head office in Montreal, with local area networks in Toronto and Halifax. Every night, head office connects to the branches, uploading the day's transactions and downloading master file changes. During 2000, a major ice storm devastated large parts of eastern Ontario and Quebec, with the head office systems square in the path of the storm. EDL was hit on several fronts:

• Electrical trunk lines were destroyed in the vicinity of the head office building; offices were without electricity for three weeks.

• The roof caved in on a section of the Montreal ware¬ house, destroying 25 percent of the inventory; another 10 percent was destroyed due to temperature changes.

• Trucks were stopped on many routes for 10 days as roads became impassable due to the ice storm.

During the three weeks of the head office power failure, the Toronto and Halifax branches operated as local systems. Since there was an intervening month end, they had to pur¬ chase and stockpile additional backup tapes so that backups could be taken every day. When power resumed, a specialist from the supplier software house was called to untangle the "data mess." Special programs were written so that each day's transactions could be separately processed. It took EDL more than three months to stabilize and recover its information systems.

Required Identify the safeguards that EDL should have had in place prior to the storm that would have prevented the "data mess."

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Auditing And Other Assurance Services

ISBN: 9780130091246

9th Canadian Edition

Authors: Alvin Arens, James Loebbecke, W Lemon, Ingrid Splettstoesser

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